Problems and Strategies in Financing Voluntary Free Software Projects

This is revision 0.2.1 of this file and was published
on November 20, 2012. Revision 0.2 was published on June 10,
2005. Revision 0.1 was published on May 15, 2005 and was written was
presented as a talk at Linuxtag 2005 given in Karlsruhe,
Germany. Revision 0 was published on May 2004 is based in part of the
research and work done for a presentation on the subject given at the
International Free Software Forum (FISL) given in Porto Alegre,
Brazil.

Abstract

It's easier for a successful volunteer Free Software project to
get money than it is to decide how to spend it. While paying
developers is easy, it can carry unintended negative consequences.
This essay explores problems and benefits of paying developers in
volunteer free and open source projects and surveys strategies that
projects have used to successfully finance development while
maintaining their volunteer nature.

Introduction

The love of money is the root of all evil.

— New Testament St. Paul, in 1
Timothy, 6:10

Using voluntary labor, free and open source
software[1] projects have become massive commercial
successes. This success has been awkward and dangerous for some
projects. Today, many commercial and non-commercial entities intent
on building on the success of the free software movement find
investing and funding these projects difficult. Voluntary projects
with an influx of resources are sometimes unsure of the best ways
to use these resources without sacrificing the model upon which
their success is built. Other projects find their development
environment radically changed, sometimes for the worse, by the
entrance of paid labor into their communities that brings with it a
new style of working and a new type of inter-developer
relationships. In these ways and others, many voluntary free
software projects find themselves face to face with the reality
that it is often easier for a successful volunteer free software
project to get money than it is to spend it.

This paper aims to provide a guide for voluntary projects who
want to fund development as a well a guide for funders wishing to
work with and support these projects. It begins by looking at the
role of volunteerism in many free software projects and at the
benefits that voluntary labor brings. It turns to real examples
from the free software world to demonstrate the varied and dynamic
role played by voluntary work. It continues and explores the
problems and benefits introduced by paying developers. Finally, it
concludes with an annotated survey of strategies that free software
projects have successfully used to finance development while
maintaining the benefits of their volunteer nature.

Volunteerism in Free Software Projects

In his famous announcement, Linus Torvalds referred to the Linux
kernel project as "just for fun." This phrase is a reminder that, at
the beginning, even Linux was built entirely through voluntary
labor. It is a reminder that voluntary labor has played a complex and
dynamic role in the life of Linux and in many free software
projects. To this day, the Linux kernel has maintained its
institutionally independent nature and voluntary labor still plays an
important role in Linux development. However, the vast majority of
contributions to Linux are now the direct result of paid labor. Other
projects, like KDE, GNOME, Debian, and Gentoo also incorporate the
work of paid laborers. But each of these latter examples is driven and
led by people working in their spare time, after hours, and outside of
companies. In none of these examples are developers paid by the free
software project itself.

As free software has been commercialized, paid labor has taken
up an increasingly important role in the free software world and
many free software projects today are built as works for hire and
are released by corporations. An old and well-known example of a
primarily non-voluntary project is the postscript system
Ghostscript. Although there has been some substantial contributions
from the community, Ghostscript is almost wholly written by a
single developer. The JBOSS application server is a second example.
While JBOSS releases all of their code freely and the JBOSS team
also receives patches and contributions, their development is
wholly based on and driven by the labor of JBOSS employees. The
models pursued by Ghostscript and JBOSS are neither entirely good
nor entirely bad; there are benefits and drawbacks of both
voluntary and paid labor.

It is also worth noting that, over time, volunteer projects can
become non-volunteer projects — and vice versa. Projects
based around paid labor — even proprietary development
— have been "freed" or "open sourced" successfully and have
built thriving volunteer fueled and mixed volunteer and paid labor
communities. The Mozilla project and the 3D rendering software
Blender are two such examples. Others have floundered. Projects
like the X Windowing System have begun as volunteer-driven
projects, become projects heavily dependent on paid labor, and then
returned to a volunteer-driven development model. The Wine project
was initially a volunteer based project that is now largely driven
by paid labor within a single company.

Benefits of Volunteerism

While not every free software project can be or should be driven
by voluntary labor, many projects can gain from the work of
volunteers and from a primarily voluntary structure. Much of the
free software movement's success in creating products that are
commercially interesting is directly due to benefits inherent in
— and some cases only easily accomplished through —
voluntary work.

The metaphor of the bazaar, popularized by Eric Raymond in
The Cathedral and the Bazaar, describes a
inherently superior software development paradigm based around a
model of decentralized control and ad-hoc collaboration. The bazaar
model is only easily and cheaply realizable through volunteerism.
Many people misinterpreted Raymond in his description of the free
or open source development process and looked to free software
licensing alone as the key to superior software and to eventual
commercial success. However, neither licensing nor the availability
of source code gives free software its competitive edge. Licensing
and source are merely means toward an end: the participation of
many individuals and groups in the development, testing, quality
assurance and advocacy of software.

Proprietary software companies with many resources can bring in
the work of many paid laborers to achieve these ends. The free
software development model is distinguished from and has an
advantage over proprietary models because it can cheaply and easily
bring in the work of volunteers. By harnessing volunteers and
fostering a testing and development community that is actively
invested in the project, voluntary labor renders free and open
source development more effective, equally reliable, extremely
inexpensive, and massively cost-efficient.

Perhaps the most important benefit of volunteerism in free
software development is institutional independence. Institutional
independence in a free software project means that no company or
organization has a monopoly on the ability to define specifications
or to direct the project. To users and developers, institutional
independence means that they
get to define the specifications; it is a broad perceived autonomy.
Projects that are driven or directed by volunteers are more easily
able to appear institutionally independent than corporate or
organizationally directed projects or any projects that incorporate
paid labor.

Sun, IBM, HP, and others can cooperate and compete around the
Linux kernel because Linux is seen as being beyond grasp or control
of any one of them. Because the Debian project is viewed as
institutionally independent, there are multiple companies — a
short list includes Canonical, Progeny, Credativ, and Linspire
— who support, build on, and contribute to the work of the
Debian project. There is comparatively less collaboration between
Red Hat-based derived distributions that work with technology that
does not share the same level of perceived institutional
independence and have diverged over time as a result.

For most free software practitioners, institutional independence
also implies that there is less potential for one company or group
to "corner" or enclose a market or to create a dependence on their
company: a result that that users find attractive. Institutionally
independent projects can act as spaces where competing groups work
together on a single project and a set of shared goals. Because
they are not in the service of anyone, they can provide "common
ground" for "coopertition" — a mix of cooperation and
competition that is largely foreign to the traditional software
development world but is increasingly common in free software.
Institutional independence translates into the ability of a
software and the development community to, through the work and
collaboration of individuals and groups, become stronger and more
robust than they would otherwise.

Finally, volunteer projects have the proven benefit of being
able to build great products with little — sometimes
no — financing. It's
easy to fund a project that does not need funding! Working from
donated bandwidth, hardware and labor, Debian has built the single
largest free software development project with total expenditures
in the tens of thousands of US dollars. Even most of these
expenditures could probably have been avoided without sacrificing
the project's achievements. For projects like Debian with limited
financial resources, volunteerism can be a great way to get things
done.

Problems with Funding Volunteerism

While there are benefits to volunteerism, the potential
productive benefits of paid labor can not be dismissed. Paying a
laborer to do a task is a great way to ensure that the task is done
and that it is accomplished on time. Some voluntary free software
organizations have a history of difficulty in meeting deadlines or
in acting predictably. Debian's long-delayed and most recent
release, sarge has become
infamous as an example of this limitation. However, while the
benefits of paid labor in solving these problems are obvious, the
less obvious drawbacks can be just as serious. These include the
tendancy of paid labor to crowd out volunteers, the negative impact
of paid labor on the transparency of free software projects, and a
general degradation in the quality of the software produced.

There is much anecdotal evidence on the negative impact that
money can have in voluntary organizations. Recently, research in
Scandinavia has put brought to light empirical evidence to back up
these claims. Research by Bernard Enjolra at the Institute for
Social Research in Oslo, Norway monitored the role and nature of
voluntary labor in Norwegian sports organizations. He then kept
track of the role and extent of volunteer labor as paid labor
connected to commercial income as "commercial resources" was
introduced to handle certain elements of book keeping and
organizing. The result was that less people volunteered — for
these tasks in particular but also overall — and that those that
volunteered volunteered less. His summary states:

Empirical results using cross-sectional data on voluntary sport
organizations in Norway and on their members show a decrease in
voluntary work from an increase in commercial income. Voluntary
work and commercial income appear as substitutable
resources.[2]

In short, when it comes to voluntary work and paid labor, you
can have one or the other but not both. Enjolra calls this process
"crowding out." While it is unclear why paid labor crowds out the
work of volunteers, Enjolra hypothesizes that volunteers are less
motivated to work for free when they know that others are being
paid to do the same work or will be paid to do the work if they do
not. Faced with paid workers in their organization, volunteers
wonder why they are not getting paid for their work and feel more motivated to
volunteer somewhere else. In this way, a small amount of paid labor
in an organization or project highly dependent on the work of
volunteers can do more harm than good.

While there has been not empirical evidence from within the free
software community confirming the applicability of Enjolra's
research, I see no reason why Enjolra's conclusions would be
limited in applicability to sports organization or to Norway. It's
worth noting that Enjolra does not state that the use of paid labor
was a "bad" decision in his examples. He only points out that it
has a real and often inescapable negative impact on the amount of
voluntary labor employed in the organization and that voluntary
organizations introducing paid labor should take this into
account.

Another drawback of paid labor is a reduction in transparency.
The example of the X11 project and the X Consortium can help
demonstrate the role that this can play in
organizations.[3] The X11 project began as a community
driven project with developers from around the world connected to
each other via the Internet. The project released regularly twice a
year and generated a good deal of serious commercial interest.
However, the project's distributed mode of work had serious
limitations. Serious network problem early on made coordinated work
extremely difficult for much of a year. To solve these and other
problems, the X Consortium was created and
funding and paid labor was introduced. The result of the this was,
in the words of developer Jim Gettys, to "make some people 'more
equal' than others," and to "disenfranchise 'outsiders.'" Quite
simply, volunteer labor was crowded out. Among volunteers who
stopped contributing regularly to X was Python author Guido von
Rossum.

The more meaningful lesson to be learned from the X Consortium's
mistakes lies in in a substantial drop in transparency in X to most
of its developers. When the consortium was created, paid
programmers were moved into a single office. It was now quicker and
more efficient to discuss a new feature or a design decision at a
whiteboard or blackboard or over the top of the cubicle.
Development became quicker and more efficient for people who worked
in the office and more difficult to track, follow, and participate
in for anyone working from remote or who had less time to
devote.

Part of being "more equal than others" was having easier access
to information and status and to the other people working on the
project. While the project was still "open" to contributions from
its community, volunteers had a more a difficult time following the
project's development. X showed how, by creating a in-group and, by
extension, an out-group, the introduction of paid-laborers into
volunteer projects can introduce the potential for this effect.

The third problem introduced by paid labor in volunteer projects
can also be learned from the X Consortium's experience. In X and in
many other projects, the introduction of paid labor can change the
direction of the project in ways that do not always serve the
interests of users. It seems only natural that paid labor is
directed toward funders' needs or desires and influence the
"strings" that are attached to money. In the case of X, "strings"
attached to the money put certain aspects of the desktop that were
controversial off-limits to consortium staff. Because toolkits,
desktop environments, and 3D were each controversial or proprietary
areas among the funders, staff was not paid to work on these areas.
The result was several major gaps in the X11 platform that
restricted the ultimate usefulness of the software. Had the workers
been working as volunteers, these were problems that would have
been addressed early on — there was high demand from users.
However, the introduction of paid labor directed the project in
other directions.

The impact of these problems will differ in degree and depend on
the nature and make-up of the project. Problems will often be minor
and ignorable; they will sometimes be catastrophic. The sad end of
the X Consortium story is that, not long after it was created, the
consortium collapsed. The collapse was due directly and indirectly
to the problems attached to funding described above. By the time
that the consortium collapsed, the volunteer X project had
completely disappeared. X lay dormant for some time before being
resurrected later for GNU/Linux by the XFree86 project and now
again by a new X.org group using the defunct X Consortium's
domain.

Creative Solutions

While it's important to be critical and realistic about the
negative impact that money can have in voluntary free software
organizations, it's not always reasonable to suggest that
volunteers refuse all money or that corporations refrain from
funding voluntary software projects altogether. Money, even paid
labor, can be an effective tool in free voluntary software projects
when used carefully, strategically, and intelligently.

In terms of the dangers of funding voluntary projects, refusing
all funding is a no-risk solution. However, the lack of risk is
balanced by a dramatic set of limitations to a project's potential
achievements. For some projects, particularly ones where
institutional independence and political neutrality are central,
this may be the best course of action. For many others, there are
better options.

Low Risk Solutions

The safest way for voluntary free software organizations to
spend money without compromising voluntary labor is to not pay for
labor — and the production of code in particular — or to fund
labor indirectly.

One great way to do this, employed frequently by the Debian
project, is to use donations to purchase hardware to help
facilitate development. The most frequent and largest types of
expenditure by the Debian project and its supporters is hardware
for servers, other forms of infrastructure, and bandwidth. Each of
these are viewed as shared resources within the project which
avoids the appearance of paying an individual and valuing some
contributions more than others — even if an individual makes
disproportionately large use of the machine or infrastructure in
question. When a developer steps down, the project infrastructure
they use is passed on to another volunteer.

Another good way to fund projects is to build "capacity."
Capacity describes work or resources of any organization devoted to
something other than the groups' core goal but that makes the
project more effective or efficient. Developing or building an
accounting system is a good example of capacity. Because it is
outside of the core goals and work of the project, funding capacity
is less likely to crowd voluntary workers out. Since infrastructure
and increased or improved capacity can help an entire project run
more smoothly, funding capacity in this way can help a voluntary
organization become more streamlined and effective with only very
minimal risks of crowding out volunteers, affecting transparency,
or resulting in a lower quality product.

Another good low-risk solution is to use funds to organize or
sponsor conferences, seminars, meetings or workshops. For groups
with less funding, money can be spent on securing a venue,
bandwidth, food for attendees, or other conference expenses. For
projects with more funding, need-based or merit-based travel aid
can be offered to help attendees reach the conference. Conferences
provide a venue for sharing information between members of a
volunteer team, allow for in-person brainstorming and design
sessions, help increase the quality of relationships between
members of the project, and can act as a reward to "sponsored"
developers.

DebConf, the annual Debian conference, is a good example of
strategic conference funding and is how the Debian project spends
the vast majority of funding each year. Lodging, bandwidth, the
conference venue, and food are normally paid for all attendees
based on a first-come-first-served basis until funds are depleted.
Additionally, travel aid is offered on a combination of need and
merit based systems going first to speakers with accepted
proposals, then to official Debian developers, and finally to
qualified contributors to the project over the previous year.
Funded conference attendance acts both as a reward for active
volunteers and a step toward creating a positive, fun, and highly
educational event for all attendees. Each year, there are
participants who are less involved in the Debian project before the
conference but who increase their involvement after. Additionally,
DebConf acts as a venue for airing ideas and proposals between
developers and for gathering feedback on controversial issues.

A related, and sometimes overlapping model of funding involves
funding code sprints. Popular in the Python and Zope communities
and with increasingly popularity elsewhere, sprints are intense
sessions of development — usually around one week long. They
are used as catalysts for development and have seen major leaps
forward in the development of features and code within very small
amount of time. Sprints are like conferences in most aspects except
that the emphasis is more on the production of code and sustained
hack-sessions than on presentations and discussions. They also
usually involve less people than a conference and attendees are
usually limited to the most actively involved volunteers on a
project. The Plone Foundation and SLX Debian Labs in Norway has
effectively used the funding of sprints to accomplish time-based
development goals.

While conferences and sprints can be a clever way to spend money
without sacrificing the voluntary nature of development projects,
it is worth keeping one important caveat in mind. When a project
selects people for funded attendance at the expense of others, it
demonstrates favoritism that can be divisive. In the process of
organizing these events, it is important to maintain a high degree
of transparency and fairness. Organizers should use published and
fair criteria to determine conference funded attendance and leave
attendance open to all. Good criteria for fair selection includes
"first come, first served," constructive activity on mailing lists,
the number of important commits to a source code or documentation
repository, or a good reputation among fellow developers (e.g., as
determined by a fair and representative committee).

Funding
Labor Strategically

Because the creation of software is the central and sole goal of
many free software projects, the desire to fund development is
often unavoidable. When voluntary projects choose to pay people to
develop code, there are certain techniques and recommendations that
can minimize the potential negative impacts on voluntary labor.

One important question to keep in mind is: when a project is ripe for funding?
Paid labor within a young project without a viable and sustained
level of contributions from volunteers will often translate into a
systemic lack of volunteer contributions going forward. Paid labor
early in the life of a voluntary project is more risk-prone than
paid labor later. The Debian-Nonprofit turned down funding for paid
labor in order to help build a sustainable and viable volunteer
project first. This is especially important in the case of limited
and time-limited funding. If a project is dependent on funding and
the funding runs out, the lack of a volunteer-base to carry the
project forward can spell death. Many developers have a difficult
time transitioning from paid labor to volunteerism.

When paid labor is introduced into a free software project, is
it important to maintain a high level of both criticism and
strategy. It is essential to carefully select the type of work that
will be funded. There are a number of techniques and guidelines
that can be helpful in doing this.

One useful model that shares common ground with the idea of
funding capacity described above suggests funding primarily
non-technical work. Paying people to do the equivalent of project
management, book-keeping, or writing funding applications for a
conference can be less controversial and less divisive than paying
someone to write code; it can avoid crowding out coders while
filling unfilled or neglected roles.

Another related model is to pay programmers to do work that
participants recognize that no volunteer can do. Jobs that require
an excessive amount of research or that are extremely tedious might
be good candidates. Explicitly limited jobs, in terms of the scope
and duration, may also make good choices. Time limited efforts,
including projects under very tight deadlines, are often
appropriate. Features that have remained on a todo-list and that
are widely recognized as important are good candidates for
strategic funding. Widely advertising feature requests and then
only funding unimplemented requests can also be effective. However,
each these suggestions can run the negative risk that people not
fix a problem or address an important issue if they think that,
eventually, they or someone else might get paid to do it.

The most important concept to remember in determining what to
fund is the appearance of
the funding to the volunteers. It's not enough for the funder to
think that problem cannot be solved by voluntary labor alone; the
volunteers must think that
the problem cannot be solved by voluntary labor alone or the
funding will run the risk of turning off and crowding out those
volunteers.

As mentioned in the discussion of choosing conference attendees,
choosing paid laborers must be fair. Projects raise funding through
the goodwill generated by the work of the entire project and using
that funding to pay a small subset of volunteers can be extremely
divisive. Fairness and transparency must play a central roles in
hiring anybody.

Outside
Organizations

A final, more risky, strategy is to involve the work of outside
organizations in the work of the voluntary project. Alluded to in
the introduction, Debian provides an example of this strategy.
While the Debian project does not fund for development work, many outside
organizations fund work in Debian toward their own goals and beyond
the direction or control of the project. Instances of this range
from simple cases of an employer paying an employee to maintain
tools used in the employer's business to more complex situations
involving companies whose core business is based around selling and
supporting Debian or their own distributions based on Debian.
Credativ, Progeny, HP, SLX Debian labs, and Canonical are examples
of companies and groups who do targeted development within the
Debian project from outside of the project.

The key to success in these situations is to maintain the
institutional independence of the larger project in the minds of
the volunteers. If a voluntary projects looks like an arm of a
corporately controlled project, volunteer work will be crowded out.
The Fedora project, with its very strong relationship to Red Hat,
is an example of a failed attempt as this model; many volunteers or
potential volunteers have felt that they do not have as much of a
voice in the direction of Fedora as Red Hat's developers and
managers. In part because the Debian project is so large and in
part because there are so many companies and organization actively
involved in funding Debian work, the situation in Debian is
different. Progeny and Canonical (to name just two important
examples) have done a much better job than Red Hat in sustaining
voluntary work in their volunteer "upstream" project. Their models
can provide inspiration to others following a similar course.

Transparency

Regardless of the steps that a project chooses, transparency
will act in a central role in maintaining volunteerism. Had the X
Consortium been better about maintaining transparency, their story
might not be as dismal.

There are a few concrete steps that can be advocated in terms of
maintaining transparency; several have introduced already. Another
simple solution is to employ open mailing lists: allow anyone to
join and anyone to participate in any list; only create closed or
private lists after strongly considering the negative impact on
volunteerism and the openness of the project.

It's also important to ensure that the public forums are used by
the "internal" developers. Even if developers or programmers work
in the same building or in cubicles next to each other, they should
resist the temptation of having conversations in person because the
information from these conversations will never reach the volunteer
community. Intentionally organizing a distributed company is one
way that this can be approached by companies working on projects
with volunteers. Implementing such a structure was an intentional
decision made by Canonical Ltd. in hiring developers and
structuring development. Ubuntu maintains no closed lists and makes
all development, design, and government decisions in open forums
and, due to is distributed nature, is exceptionally transparent for
a project incorporating a large body of paid labor from a single
company. [4]

Additionally, developers should stay conscious of the openness
and transparency of their communication mediums. For the most part,
the following rule of thumb can be useful: mailing lists are better
than IRC which is better than the phone which is better than
chatting in person. Developers should remember that when there are
in-person meetings or phone meetings — especially ones where
decisions are made — these must be written up and reported
back to the community in an open forum.

Conclusion

Funding voluntary free software projects is not easy if one
wants to maintain the project's voluntary nature. For those who go
ahead and introduce paid labor into a primarily voluntary free
software project, it's important that they keep in mind the
difference between free and proprietary development models.
Especially for those with experience in proprietary software
development, the most natural way of spending money sacrifices many
of the benefits of open source and free software development that
are tied intrinsically to volunteer labor.

Those spending money should consider pursuing funding models
that avoid paying individuals and should strongly consider the
benefits and drawbacks described here when doing so. They should
only do so strategically and while maintaining a high degree of
transparency. Above all, both funders and members of projects
should strive to stay critical, stay creative, and stay transparent
throughout the entire funding process. Done critically, creatively,
and transparently, voluntary free software projects can use money
and paid labor to a tremendous benefit that only magnifies their
accomplishments.

Footnotes

[1] The Free and Open Source Software
movements are parallel movements with a complex relationship and
history outside the scope of this essay. When discussing software,
licenses, and development communities, the terms are usually
synonymous. When discussing the motivation, philosophy, and
politics behind the the production of this software, the terms vary
wildly. As to the nature of the distinction, an inadequate but
useful distinction can be drawn: Free Software is a social
movement; Open Source is a development methodology. For the purpose
of this essay, I use the term free software to refer to both free
and open source software.

[2] Enjolra's finding is published in an
article called "Does The Commercialization Of Voluntary
Organizations 'Crowd Out' Voluntary Work? published in the Annals
of Public and Cooperative Economics (Number 73:3, 2002, pp.
375-398).